We sometimes think of states as competitors, given the competing interests of attracting investment opportunities and growing commercial activity. That said, the twin developments of the shale boom and ensuing manufacturing renaissance show that doesn’t always have to be the case. Recently announced plans in Ohio to build a new ethane cracker plant along Pennsylvania’s border in Belmont County, Ohio, should be welcomed by Pennsylvanians as an opportunity to further bolster and activate supply chains involved with our energy industries.
Pennsylvania has made the oil and gas industries a key in both our history and more importantly now, our future, and Ohio is following suit. Both states lay claim to the resources in the Utica and Marcellus Shale – which produces natural gas – and ties them together in a way that supersedes state boundaries. This is not only significant in its own right as an energy and power source, but also as an essential building block to create raw materials for new manufacturing enterprises.
Cracker plants are petrochemical processing facilities that chemically break down ethane from fracked natural gas into small molecules that can be turned into plastics or other materials. This raw feedstock is then used to create a variety of finished manufactured goods, ranging from the more mundane such as water bottles and packaging to the much-needed personal protective equipment (PPE) our health care heroes on the frontlines are currently using in the fight against COVID-19.
Further, Ohio should be eager to further embrace the tangible environmental gains natural gas presents. Already natural gas has proven itself to be a big driver in emissions reductions for the state, but folding in more natural gas capacity and utility to that added capacity can build on gains being made. Emissions reductions from natural gas look to be sustainable, too. According to the American Petroleum Institute’s second annual Environmental Partnership report, methane intensity from natural gas production has fallen annually since 2011. In short, the production of natural gas has helped reduce both methane and carbon dioxide emissions over time.
One can also presume that the added functions of a cracker plant will inspire producers to double down on their operations and continue to replace coal-fired energy with the cleaner, more efficient natural gas-generated variety.
The proposed PTT Global Chemical Co. cracker plant in Belmont County will serve as a complement to an existing Shell facility in Beaver County, PA. Another cracker plant in the region will undoubtedly draw more business into the area, thanks to increased capacity and constitute one of the largest economic development projects in the region’s history.
The cascade effects of this facility would be significant. It’s a lesson straight from Economics 101: the idea that savings or investment by companies contributes to the economic benefits for workers and various communities. The same idea can be applied to large energy infrastructure or manufacturing projects as well. Unfortunately, opponents of the PTTGC ethane cracker plant in Belmont County have failed to acknowledge the likelihood of these benefits. A case therefore needs to be made.
In addition to creating thousands of temporary construction jobs, the Belmont Cracker will also create hundreds of full-time jobs and employ highly skilled workers such as chemical engineers, chemists, lab technicians and other well-paid employees. As part of an economic deal with local governments, the backers of the project have also committed to invest $47.5 million over the next 15 years in community needs such as education. The project is expected to generate more than $20 million in local sales tax revenues during construction, demonstrating significant benefits to the community.
The policy decisions of states can make a big difference for their citizens and companies and the PTTGC cracker plant is an example of this process at work. This welcome addition would help revitalize a region that suffered from the demise of the steel industry. A transition to globally competitive manufacturing would be a big step toward making the Rust Belt an even bigger player in the energy industry, and would bring more jobs and opportunities for Pennsylvanians.
Earl Baker is a former two-term senator in Pennsylvania representing Chester County, and chaired the Labor and Industry Committee. He also was a county commissioner.